Pac-12 TV Network: Assessing the options (one of them is a doozy)

Guessing along with the Pac-12 is a risky business these days given the bold, creative nature of the conference under commish Larry Scott.

But the Hotline has never been afraid to swing and miss, especially when it comes to big stories — and the Pac-12 TV Network qualifies as a big story.

I’ve had a series of conversations with industry analysts has over the past month, trying to pin down Scott’s business plan — or at least the options he’s considering. (The conference is weeks away from finalizing the details.)

Best I can tell, the league is mulling three models — and one of them is, to say the least, revolutionary:

Model 1: Flip a channel.

In this scenario, the conference would partner with an existing programmer and flip, or re-brand, an existing channel in much the same way Discovery Health Channel was turned into the Oprah Winfrey Network.

The beauty of this model is that it eliminates distribution risk — the conference would be gaining access to a channel that’s already in 30-40 million homes, at least.

Marketing would account for the bulk of the costs.

The drawback is that it would almost certainly have to give up an equity stake in the Pac-12 Network. Whichever programmer it teams with, would want a cut of the profits.

Model 2: Start from scratch.

The league would partner with an existing cable or satellite operator and develop a new channel, with distribution baked into the partnership.

For instance, if the league teamed up with Time Warner, it would have guaranteed distribution in Los Angeles County, where TWC dominates. Or it could align with DirecTV.

The league has had discussions with Comcast, according to several sources, and that partnership would make sense on several levels:

Comcast is the nation’s largest cable operator — the Pac-12 Network would have instant, guaranteed access to approx 25 million homes.

Comcast also has production capacity, thanks to its Regional Sports Networks.

And there are six empty floors in the Comcast building in downtown San Francisco.

But I also wonder if there aren’t more than a few hurt feelings — Comcast thought it was going to land the Pac-10 TV rights but lost out to the ESPN/Fox combo bid.

And I wonder if the Pac-12 would have to give up more control than Scott wants.

Model 3: The non-subscription approach

This is the whopper: The conference would bypass the traditional, sub-based model and align with one of the tech giants.

Instead of teaming up with Time Warner or Comcast, the league would partner with Google or Apple.

The drawback to this approach is that in the short term, the conference would give up the revenue that comes from subscription fees — it would rely on advertising alone for revenue.

But because of the $250 million flowing in annually from the Fox/ESPN, the league has financial flexibility — it can select the network structure that best fits its philosophy and long-term needs, even if that’s not the most lucrative near-term option.

The Google/Apple TV model is clearly a play on the future — in three or five years, big screen televisions and laptop computers will be one in the same.

It also fits with the west coast’s spirit of innovation that Scott and the league presidents are so intent on embracing.

(By the way: Google co-founders Larry Page and Sergey Brin are Stanford grads, and Stanford president John Hennessy sits on the Google board.)

I’m not saying the league will absolutely adopt this structure for the Pac-12 Network — models 1 and 2 are also being examined closely.

But conference officials have had discussions with representatives of the tech giants, and Scott is serious about partnering with Google or Apple. Very serious.